Market evolution: Expandable polystyrene (CN 390311) — 2015–2025

Introduction

This report examines the evolution of EU external trade in expandable polystyrene (EPS) in primary forms, classified under customs code 390311, over the period 2015–2025. EPS is a key polymer material used predominantly in insulation, packaging, and construction. The decade under review reveals a dramatic transformation in the EU's trade posture: the bloc shifted from being a net exporter of EPS to a net importer, driven by a combination of declining domestic production, surging inbound shipments from new supplier countries, and a sharp contraction in export volumes. Total imports rose from €75.7 million in 2015 to €237.9 million in 2025, while exports fell from €179.0 million to €149.4 million. This report analyses these dynamics across three axes: the structural trade balance reversal, the geographic reorientation of trade flows, and the domestic production contraction coupled with price volatility.

1. A Structural Reversal: From Net Exporter to Net Importer

The most striking feature of the 2015–2025 period is the complete reversal of the EU's trade position in expandable polystyrene. In 2015, the EU recorded a trade surplus of €103.3 million; by 2025, this had turned into a deficit of €88.5 million. Net import reliance, which stood at −3.4% in 2015, swung to +3.9% in 2025—a shift of over 200 percentage points in relative terms.

1.1 Export Volumes Halved While Values Defied Gravity

EU exports of EPS in quantity terms fell by nearly half, declining from 127,366 tonnes in 2015 to 64,551 tonnes in 2025 (−49.3%). Despite this collapse in volume, export value fell by a more modest 16.6%, because unit export prices rose from €1,405/t to €1,529/t (+8.8%). This divergence indicates that the EU retained some pricing power in its export markets—likely reflecting the higher-value niche segments it continued to serve—but was unable to maintain volume competitiveness against lower-cost foreign suppliers.

1.2 Import Volumes Tripled on the Back of Price Competition

On the import side, the picture is the mirror image. EU import quantities tripled from 51,302 tonnes to 172,231 tonnes (+235.7%), while import values rose from €75.7 million to €237.9 million (+214.4%). Notably, import unit prices actually declined from €1,475/t to €1,381/t (−6.4%), suggesting that foreign suppliers increasingly competed on price, undercutting domestic EU producers and capturing market share.

1.3 Trade Intensity Rose, Signalling Growing Openness—and Exposure

The EU's trade intensity in EPS (trade as a share of apparent consumption) increased from 10.7% to 18.3%, while export propensity (exports as a share of production) rose from 7.2% to 8.2%. While this reflects greater integration with global markets, it also means the EU's EPS supply chain became more exposed to external shocks and foreign competition—a vulnerability made all the more significant by the simultaneous decline in domestic output.

2. Geographic Reorientation: New Suppliers Enter, Old Partners Vanish

Behind the headline trade figures lies a dramatic reshuffling of the EU's trade geography. The partner countries that dominated EPS trade in 2015 were largely supplanted by a new set of suppliers by 2025, with profound implications for concentration and supply security.

2.1 Türkiye Became the Dominant Import Source

The single most consequential shift in EU EPS trade was the rise of Türkiye as the EU's primary import partner. Turkish imports surged from just €2.3 million in 2015 to €98.7 million in 2025—an increase of over 4,000%. This single partner accounted for 41% of total EU EPS imports by value in 2025, making it by far the largest supplier. Simultaneously, EU exports to Türkiye collapsed from €48.0 million to €3.4 million (−92.9%), reversing what had been the EU's largest export flow. This dual dynamic—massive import growth and export collapse with the same partner—is the single largest driver of the overall trade balance reversal.

2.2 Iran, China, and Mexico Emerged as Significant Suppliers

Beyond Türkiye, several other countries saw their exports to the EU grow dramatically over the period:

Iran's emergence is particularly striking: from virtually zero imports in 2015 to €24.5 million by 2025, though the trajectory was volatile (reaching a peak of €115.6 million before declining). China similarly grew from €6.1 million to €44.9 million, though its share fluctuated significantly. Mexico's entry from near-zero to €13.0 million represents entirely new supply chain linkages. These developments suggest a broadening of import sources, but also a growing dependence on geopolitically sensitive suppliers.

2.3 The United Kingdom Became the EU's Stablest Export Market

While the EU's overall export footprint shrank, the United Kingdom emerged as the most resilient destination for EU EPS exports, with value remaining broadly stable at around €45–46 million over the decade (a modest +1.4% change). The UK's low coefficient of variation (0.19) in export flows confirms its role as a dependable market, likely supported by geographic proximity and post-Brexit trade continuity agreements. Norway also grew significantly as an export destination, rising from €7.4 million to €51.1 million (+587%), making it the EU's largest single export market by 2025.

2.4 Export Concentration Increased While Import Concentration Eased

The Herfindahl-Hirschman Index (HHI) for EU exports in value terms rose from 1,555 to 2,287 (+47%), indicating that exports became more concentrated on fewer destination markets—primarily the UK and Norway. For imports, the HHI declined modestly from 2,764 to 2,484 (−10%), suggesting a slight diversification of supplier base, though the level remains well above 2,500, the commonly cited threshold for a "moderately concentrated" market. The persistence of high import concentration, driven by Türkiye's dominant position, remains a structural vulnerability.

3. Domestic Production Decline and Price Shock Dynamics

The external trade shifts described above did not occur in a vacuum. They were closely linked to a sustained contraction in EU domestic EPS production and punctuated by acute price shocks that reshaped trade values in specific years.

3.1 EU Production Contracted by 30% in Volume

According to the production data, EU production of expandable polystyrene fell from 1,854,869 tonnes (kilogram basis, i.e. 1,854,869 metric tonnes) in 2015 to 1,299,182 tonnes in 2025—a decline of approximately 30%. Production value fell more modestly, from €2.18 billion to €2.10 billion (−3.7%), implying that domestic producers partially offset volume losses through higher prices. This production contraction explains why the EU could no longer sustain its export volumes and became structurally reliant on imports to meet domestic demand.

3.2 A Synchronised Price Shock Hit EU Exports in 2021

The data reveals a significant price shock event centred on 2021, affecting EU exports to multiple partners simultaneously. The most pronounced shock was in exports to the United Kingdom, where unit prices surged by 57.2% with an abnormality score of 6.3 (i.e. 6.3 standard deviations from the norm). Similar price spikes were detected for exports to Serbia (+58.5%) and Bosnia and Herzegovina (+57.2%). These coincided with the global supply chain disruptions of 2021—driven by post-COVID demand recovery, raw material shortages, and surging energy costs in Europe—which pushed EPS prices to multi-year highs. The UK shock alone affected 37.4% of total EU export value, underscoring the market's weight.

3.3 Export Partners Showed Mixed Volatility Profiles

The volatility analysis reveals that EU export flows were generally more stable than import flows, with the notable exception of China (coefficient of variation of 1.78). The UK (CV: 0.19) and Serbia (CV: 0.23) were the most stable export destinations. On the import side, China (CV: 1.16), the United Kingdom (CV: 1.28), and Russia (CV: 1.06) showed the highest volatility, indicating that sourcing from these partners carried significant year-to-year uncertainty. Norway stood out as a remarkably stable import source (CV: 0.21), consistent with its role as a long-standing, geographically proximate supplier.

3.4 Within the EU, Production Concentrated Around a Handful of Member States

The specialisation data for 2025 shows that EPS production within the EU is highly concentrated. The Netherlands alone accounted for 31.4% of EU production value and 14.5% of total EU trade, while Belgium held 15.7% of production and 8.5% of trade. Greece and Finland showed the highest relative specialisation indices (RSCA of 0.84 and 0.68 respectively), though their absolute production shares were small. At the other end, Denmark, Latvia, Ireland, Slovenia, and Luxembourg showed negligible EPS production, indicating these Member States are entirely dependent on inter-EU trade or external imports for their EPS needs.

Conclusion

The EU's expandable polystyrene market underwent a fundamental transformation between 2015 and 2025. A decade ago, the EU was a net exporter with a comfortable trade surplus; by 2025, it had become a net importer, with a trade deficit of €88.5 million. This reversal was driven by three reinforcing dynamics: (1) a 30% contraction in domestic production that eroded the EU's capacity to serve both domestic and export markets; (2) the emergence of Türkiye as a dominant low-cost supplier, alongside growing imports from Iran, China, and Mexico; and (3) a near-halving of export volumes, concentrated increasingly on the UK and Norwegian markets. The 2021 price shock episode demonstrated how external disruptions can rapidly alter trade values, while the high and rising import concentration (with Türkiye alone accounting for 41% of imports by 2025) points to a structural vulnerability in the EU's EPS supply chain. Looking ahead, the sustainability of this trade position will depend on the EU's ability to arrest the decline in domestic production, diversify its import base, and manage the cost competitiveness gap that has allowed foreign suppliers to capture an ever-larger share of the European market.